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Case Study

Clicking out costs with an Internet strategy

A brick-and-mortar pharmaceutical company with dominant brands but stagnant sales needed an Internet strategy. Bain recommended outsourcing certain functions and integrating the rest around an intranet linked to key suppliers and customers. Potential costs savings ranged as high as 20 percent.

  • min read

At a Glance

  • 20% range of potential costs savings

The Full Story

Opportunity

PharmProductCo* wanted to use the Internet to cut costs and focus on growth.

  • PharmProductCo is an established brick-and-mortar company with dominant brands in mature categories, but sales have been stagnant over the last few years.
  • To achieve 5-10% Internet-related cost reductions and position the company to grow, the client had been testing Internet-based initiatives on an ad hoc basis.
  • This unfocused approach had not yielded satisfactory results
  • PharmProductCo asked Bain to advise on Internet strategy that would:
    • reduce inefficiencies and costs
    • improve speed and effectiveness increase customer intimacy

Approach

Bain used three sets of key questions to guide the client to a prioritized set of initiatives to adopt in e-business.

 

 

Recommendations

After outsourcing chosen functions, integrate the company's functions around an intranet linked to key suppliers and customers.

 

Results

Preliminary findings suggest cost reduction opportunities ranging from 3 percent to 20 percent across the company.

 

 

* We take our clients' confidentiality seriously. While we've changed their names, the results are real. 

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